@maglib Thanks, I appreciate the reply. So just to be clear:
- since these were short-term obligations (Treasury bills with terms of less than one year),
- and since I typically make no decision as to whether to include OID amortization as income in the current year (to be consistent, I usually wait until short-term zero-coupon bills mature before recognizing all gains as income),
- and since I sold them for less than par value,
therefore all gains should be treated as ordinary income. And for our purposes, ordinary income refers in this case to interest income reported on a Schedule B, rather than capital gains income reported on a Schedule D. By the way, this is consistent with the response from my broker that I just now received, which said that it is up to the client to determine how much is interest and how much is capital gains, but that the default for them is to report it all as interest. Does all of this sound correct? I just want to make sure that I understand it. Thanks again.
